Parts that concern me - in the discussion about going concern. Guess that sums up our present position...
"The Board is undertaking a process to divest the Consolidated Entity?s interests in these Tanzanian assets to take advantage of the increased focus by the larger oil and gas companies on the east coast of Africa that is being seen. A successful divestment would reduce the Consolidated Entity?s commitment obligations by $15,100,000, should they fall due before 30 June 2011. The Board is currently in talks with several interested parties who are evaluating these assets, however there can be no guarantee that divestment will occur.
If the divestment process is unsuccessful it is the Company?s intention to raise capital in the next three months to meet the commitments related to this first Nyuni well. A requirement to drill a well in the Tanzanian West Songo Songo block in the first half of 2011 also exists. However, drill rig availabilities may limit the Company?s ability to drill within this timeframe. Expenditure commitments in Italy are in question at this time due to uncertainties relating to changes in environmental laws and drilling exclusion zones that are being proposed. The Company has made applications to suspend work programme requirements and obligations on its Italian permits until these uncertainties have been clarified by the Italian government and the Ministry of Economics. The Company believes the suspension approval will be granted shortly by the Ministry of Economics.
Commitments related to the drilling of the two wells, Dunnart and Dibbler that are currently expected to commence during October 2010 in the North Perth Basin are fullyfunded."
So North Perth us fully funded, no mention of UK assets been fully funded, nor becoming due and payable (so probably next year now).
Our obligation for Nyuni is $15.1m before the end of June. That doesn't include West Songo Songo which we have to drill in the first half of 2011 as well (unless that is included - it is not clear). And italy - well on hold again so fine with that!
So really if they don't divest, there is going to be one heck of a dillution needed - $15.1m divide by 5c = 302m shares to be issued - just for Tanzania. TO be honest with you - I would actually prefer that option rather than divesting Tanzania. However I think we should be reducing our stake now selling it entirely. Farm-out West Songo Songo but still retain a stake in it.
Really aside from Divestment of Tanzania - all our hopes seem to rest now on North Perth, and the two wells there. Not a good position to be in!
KEY Price at posting:
4.5¢ Sentiment: Hold Disclosure: Held
(20min delay)